September 21 report:
On September 21, the Chinese propylene oxide market showed a weak downward trend. The main negotiation price in Shandong dropped to 11,070-11,100 CNY/ton, a decrease of 500 CNY/ton from the previous trading day; the prices in the northeastern region also fell by 400 CNY/ton. According to the monitoring system, as of September 21, the benchmark price for propylene oxide was 11,233.33 CNY/ton, an increase of 17.01% compared to the beginning of the month.
Raw Material Side: Cost‑side support has weakened. Previously, propylene prices were bolstered by rising crude oil and propane costs, but since the start of this week, both crude oil and propylene have shown signs of easing, reducing cost‑driven support for propylene oxide and prompting a shift in market sentiment toward bearishness. According to monitoring data, as of September 21, the benchmark price of propylene stood at RMB 9,641.00 per ton, up 7.39% from the beginning of the month (RMB 8,977.67 per ton).
Supply side: Previously shut down facilities have gradually resumed operations. Units at Satellite, Qixiang, and other plants have returned to operation, with the HPPO unit at Qixiang Tengda gradually increasing production. The market's supply of goods has become noticeably more abundant compared to earlier, alleviating the previous tight spot supply situation. China's capacity utilization rate has rebounded from around 64% to about 70%, with the expected increase in supply gradually materializing.
Demand side: The performance during the "Golden September" peak season was mild. The overall operating rate of downstream polyether enterprises in China was not high, and there was a clear resistance to high-priced raw materials. Most purchases were small orders based on rigid demand, with limited new order increments. Other downstream sectors, such as propylene glycol, also showed a stalemate with cost support and weak demand, leading to insufficient procurement of propylene oxide.
Overall forecast: With cost support easing and increased supply coming to fruition, coupled with lackluster downstream demand, the propylene oxide market is likely to remain in a weak, consolidating range in the short term. Key factors to watch include the pace of restarts and capacity ramp-up, as well as shifts in downstream inventory‑building intentions.
